The Economic Implications of the New American Trans Pacific Economic Partnership (TPP) Strategy：An Analysis Based on the GTAP Model

　　Abstract: This article analyzes the incentives for the new American TransPacific Economic Partnership Strategy (TPP Agreement) and the economic implications of America’s participation. The article applies the GTAP model to consider the possible steps involved in the US participating in TPP cooperation, and on the basis of a simulation, derives the following conclusions: (1) Entering an FTA with the US (i.e., cancelling trade barriers) will benefit countries that participate in terms of GDP and trade and also net other benefits, while the interests of states outside the FTA will be harmed; (2) If cooperation is limited to present TPP members, the direct, positive macro-economic impact for the US will be limited. If on the other hand, Japan enters TPP and liberalizes trade with the US, the US will obtain much greater macro-economic benefits; In order to protect the interests of some domestic industries, the US will continue to push for bi-lateral trade cooperation with South Korea and other Asian Pacific countries.

　　Author: Wan Lu is a PhD student in the School of International Economics and Trade of the University of International Business and Economics